NEW YORK (CNN/Money) - As Congress got back to work this week after a summer break, legislative proposals to ban gay marriage and to revamp the nation's security appartus dominated headlines.

Lost in the flurry was a brewing battle between the entertainment and technology industries over widespread music and movie downloading on the Internet.

Legislators in both the House and the Senate are mulling separate bills aimed at cracking down on peer-to-peer networks, which are Internet services that consumers use to swap music, movies and other data.

On Wednesday the House Judiciary Committee voted in favor of a bill that would impose criminal penalties for copyright violations that occur through peer-to-peer networks.

Meanwhile, the Senate Judiciary Committee was getting ready to take up an unrelated bill proposed earlier this summer that aims to hold liable the companies that provide either the file-sharing service or device used for illegal downloads of music or movies, effectively shifting the blame from individuals.

Consumer groups and technology companies have rallied against both legislative proposals, arguing that the vague wording of each bill would harm more than just peer-to-peer networks like Kazaa and Grokster. It would also make mainstream tech companies like Hewlett-Packard and Apple Computer vulnerable to copyright lawsuits.

"People are really stirred up about this," said Art Brodsky, a spokesman for Public Knowledge, a leading consumer advocacy group. Public Knowledge has strongly oppposed both pieces of legislation, but is especially concerned about the so-called "Induce Act" pending in the Senate.

Courts are backing off

Proponents, led by the Recording Industry Association of America (RIAA) and the Motion Picture Association of America (MPAA), claim legislation is needed to protect the entertainment industry now that it has lost some crucial court battles.

Just last month, the same federal appeals court in San Francisco that brought down Napster in 2001 ruled that Grokster and StreamCast Networks, the distributor of Morpheus, do not violate film and movie copyrights by operating Internet file-sharing services.

The appellate court found that Grokster, Morpheus and other so-called peer-to-peer services can't be held accountable because, unlike Napster, they have less control over what users do with their service.

Without support from the courts, the entertainment industry has turned the heat on legislators. The RIAA has also filed thousands of lawsuits against individuals.

Entertainment companies claim that free Internet downloads rob them of their livelihoods.

"The music industry is first, the gaming industry will be next, and the movie industry will be next after that," predicted Christian Castle, an entertainment industry lawyer with Akin Gump Strauss Hauer & Feld in Los Angeles. "Pretty soon it will be a free-for-all."

The reaction from critics was fast and fierce. Led by Public Knowledge and the Consumer Electronics Association (CEA), detractors declared the proposed legislation calamitous for the technology industry. Holding mainstream companies like Apple Computer and TiVo liable for illegal downloads using Apple's iPod or TiVo's digital video recorder would chill innovation, they said.

In response to the outcry, Hatch backed off his original proposal. Instead, he asked the U.S. Copyright Office to submit a revised version and invited input from critics.

The CEA, for one, submitted a proposed bill to regulators that would dramatically narrow the pool of companies that could be held accountable for illegal file-sharing.

Last week, however, critics' efforts seemed to have failed when the copyright agency quietly suggested revisions that Brodsky, the Public Knowledge spokesman, said contained none of their proposed changes.

On Tuesday, opponents voiced their unhappiness at a closed-door meeting held in the Senate Judiciary Committee offices and also attended by entertainment industry groups.

"Nobody on our side liked (the new version). It was basically a rewrite of the old draft," said Brodsky, the Public Knowledge spokesman. "It's obvious that the movie and the record folks think they're in the driver's seat with this one."

Critics vowed to continue their fight on Capitol Hill.

"This isn't just idle paranoia," said Fred von Lohmann, a senior staff attorney with the pro-consumer Electronic Frontier Foundation. "The technology companies are sensitive because they remember all too well that when the VCR was introduced, the movie studios sued them. When the digital audio player was introduced, the record companies sued them. And when the MP3 player was introduced, the record companies sued them for that too."

It's unclear when the Senate Judiciary Committee will revisit the Induce Act in public, but sources said hearings could happen later this month. Margarita Tapia, Hatch's press secretary, declined comment other than to say that work on the bill continues.